US stocks closed out a turbulent month on a relatively steady note despite ongoing tariff concerns. President Donald Trump’s recent comments about China violating its trade agreements sent ripples through the market, but the S&P 500 still posted its best month since November 2023. Stocks were mostly lower on Friday after President Trump blasted China on social media, claiming it had “totally violated” its trade agreement with the US.
This statement, lacking in specific details, injected another wave of uncertainty into the markets. The Dow Jones Industrial Average closed higher by 54 points, or 0.13%, after fluctuating throughout the day. The S&P 500 edged lower by 0.01%, and the tech-heavy Nasdaq Composite fell 0.32%.
Friday’s trading saw stocks initially dip following a report suggesting the Trump administration is considering expanding tech sanctions on China. The S&P 500 and Nasdaq dropped as much as 1.1% and 1.7%, respectively, in the afternoon when Bloomberg reported that the White House is mulling adding “licensing requirements on transactions with [Chinese] companies that are majority-owned by already-sanctioned firms.”
Stephen Miller, White House deputy chief of staff for policy, mentioned on Friday that the administration is preparing other trade actions targeting China, adding to the market’s volatility. Stocks pared some of their losses by late afternoon, yet the S&P 500 and Nasdaq still closed in the red due to persistent trade uncertainty.
Despite Friday’s downturn, the overall market reaction was relatively muted. Investors are beginning to anticipate that while Trump may make aggressive trade war threats, he often backs down from the most severe measures. The benchmark S&P 500 gained more than 6% this month, marking its best month since November 2023.
Best month for S&P 500 since 2023
The Nasdaq, up about 9.5% this month, also celebrated its strongest performance since November 2023. “We expect bouts of market volatility ahead as investors continue to navigate a range of market, economic, and geopolitical risks,” said Ulrike Hoffmann-Burchardi, CIO of global equities at UBS Global Wealth Management.
The trade war has returned to the forefront after a week of intense focus. Stocks rallied earlier this week when the Court of International Trade blocked most of Trump’s tariffs on legal grounds. However, this rally lost momentum as traders speculated that the White House would aggressively appeal the decision and explore other legal avenues.
A federal appeals court has since left the president’s tariff agenda in balance by upholding the CIT’s ruling, leaving the final resolution to future court deliberations. Greg Valiere, chief US policy strategist at AGF Investments, noted, “The stunning, head-spinning, mind-boggling trade fiasco will not be resolved quickly. It probably will land in the Supreme Court — and even that may not settle the issue.”
The stock market has been recovering from an April slump linked to Trump’s tariffs, but uncertainty remains.
Even though the stock market has staged a decisive rebound since the April lows, there is still plenty of uncertainty on tariffs,” stated Clark Bellin, president and chief investment officer at Bellwether Wealth. Meanwhile, the US dollar index, which measures the dollar’s strength against six major foreign currencies, ended the month slightly in the red. This marks the dollar index’s fifth consecutive month of decline, its longest losing streak since 2020.
Jonas Goltermann, deputy chief markets economist at Capital Economics, commented that sentiment around the dollar “remains negative” and the currency appears “vulnerable to further bad news on the fiscal and trade policy fronts.”
Investors will continue to monitor these developments closely as uncertainty in trade policies and their economic implications persist.
